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by Clemency Burton-Hill

AS I sat in the Tate Modern listening to Tony Blair wax lyrical about
Labour’s record on the arts, it struck me as ironic that the
phrase with which he chose to describe this decade was “a golden
age”. Smarting as I was from Gordon Brown’s snap announcement
only four days earlier that a tax instrument widely used to fund the
British film business was to be withdrawn, effectively bringing the
industry to its knees, I wondered if the Prime Minister was aware that
a film currently in post-production called The
Golden Age – Shekar
Kapur’s sequel to his 1998 Oscar-winning Elizabeth – was
one of those British films which would be affected by this abrupt change
in tax legislation. Presumably not, as Blair later went on to explain
how proud he was of the way New Labour had ended the Thatcherite ‘stop/go’ approach
to supporting the arts. Gazing earnestly out to his audience of assembled
arts professionals and industry leaders, he declared “We have
avoided boom and bust in the Economy – we don’t intend
to resume it in arts and culture”.

It is common knowledge that movies take a very long time to come into fruition,
cost a huge amount of money, and therefore require a certain degree of future
security. If a project goes into development one year, securing its financing
according to the tax laws of that year, but starts pre-production in a
following year, it is subject to a switch in laws which negate previous funding
promises. Subsequently, the production will probably collapse – which is
what keeps happening across the industry, from the biggest budget movies to the
tiny independents. Everything goes into meltdown; jobs are lost, and massive
investments of time, energy and money are wasted.

As someone engaged in the film industry – or not engaged, depending on
how Gordon Brown happens to be feeling on any given morning – I cannot
think of a more appropriate description of the constant state of flux we have
been in of late than ‘stop/go’. Generating catastrophic local losses,
affecting over one hundred films in various stages of production, and
decimating Hollywood’s confidence in the UK as a viable place to produce
films, the change in tax legislation on March 2nd was the fifth affecting our
film industry in as many years.

A couple of months ago my agent rang to say I’d been offered a part in
a film due to shoot here in the Spring. Delighted, I naturally reorganised my
life around it: I started learning lines and researching the background of my
character, and turned down other exciting opportunities because of the commitment.
It, however, had not committed to me: as soon as funding was pulled, it fell
like a domino, just one of many British films to ‘go down’ instantaneously
that afternoon. Such was the industry’s panic on ‘Black Friday’ that
it took less than a week of lobbying for Brown to make a swift U-turn and exempt
films by lifting the ban on ‘sale-and-leaseback’, the mechanism which
financed projects such as The Queen and Casino
Royale. Treasury officials admitted
they “had not been aware” that the changes in tax legislation would
affect film – which seems strange given Blair’s assertion that the
arts are part of his government’s “core script” – and
we all breathed a sigh of relief as movies that had crashed were gingerly resuscitated.
This is not to say that there does not remain a sense of living on borrowed time
among film producers, particularly those independent who rely for up to 40% of
their funding on the threatened ‘GAAP’ schemes, which use generally
accepted accounting principles to create an upfront tax loss that mitigates the
risk for equity investors. But it does at least mean that such major UK productions
as Brideshead Revisited, St. Trinian’s and Genova – potentially next
year’s major award-winners – could get back up and running again.
The honeymoon period will be cruelly short, however, as the industry now turns
to the more worrying question of how to sustain future film production without
the vital investment provided by GAAP funds. Until such time, rest assured there
will be no more United 93s or Last King of Scotlands.

Tony Blair is right to describe London as “the creative capital of
the world”. We boast amazing architects, writers, musicians, artists,
dancers, filmmakers, actors and directors. Fortunately, we are no longer
in an era characterised by craven under-funding of the arts, and it is fair
to say that Labour’s
record in many areas of the creative sector has been strong. But for
Blair to have the cheek to proclaim that were it not for New Labour “I’m
not sure there would be a British film industry, or at least not one nearly
so healthy” is
quite something. Thanks to New Labour’s constant changing of the rules
and financial tinkering, there very nearly isn’t.

Clemency Burton-Hill is an actress, journalist and novelist,
and Contributing
Editor of The Liberal.